Electric Shock: Johannesburg faces 12.7% rise in power costs starting in july

In a move that will impact all residents of Johannesburg, the National Energy Regulator of South Africa (NERSA) has approved a 12.7% average tariff increase for City Power’s 2024/2025 financial year. This adjustment, set to take effect from 1 July 2024, is a result of comprehensive cost evaluations and regulatory guidelines.

City Power’s tariff hike comes after a detailed cost of supply study and considerations of several critical factors. Key among these is the rising cost of bulk electricity purchases and operational expenses. The utility’s application to NERSA was driven by the need to balance sustainable service delivery with the economic pressures faced by Johannesburg’s residents.

City Power spokesperson, Isaac Mangena said: “Our tariffs are influenced by industry inflation, the cost of bulk purchases, and our operational cost structure. We are mindful of the financial strain on our residents and have aimed to cushion the impact while ensuring the continued delivery of electricity.”

The approved increase will affect residents differently, based on their consumption levels and customer category. For example, a typical residential low prepaid customer consuming 374 kWh per month will see their monthly bill rise by R49.17, from R791.57 to R840.74. The first 350 kWh will be charged at R2.2162 per kWh, a slight increase from the current R2.0967 per kWh.

Indigent customers, who are the most vulnerable, will experience a smaller increase of 6.21%. They will continue to benefit from the inclining block tariff system, which ensures that the rate per kWh increases with higher consumption.

City Power is also introducing a gradual implementation of a basic charge for prepaid customers, aimed at better covering the fixed network operating costs. Over the next few years, a total basic charge of R200 will be phased in, comprising a R70 service charge and a R130 network capacity charge. However, indigent customers will be exempt from these charges to mitigate their financial burden.

Mangena added: “For residential high prepaid customers consuming 800 kWh per month, the monthly bill will increase by R443.81, from R1,916.76 to R2,360.57. Despite these increases, we remain committed to ensuring that electricity remains affordable and available to our customers, especially during these tough economic times.”

City Power encourages residents earning less than R6,000 monthly or facing financial difficulties to register for the Expanded Social Package (ESP) rebates at their nearest Service Delivery Centre or City of Johannesburg walk-in centres. This program offers Free Basic Electricity (FBE) to qualifying indigent citizens.

The new tariff structure aims to balance the financial sustainability of City Power with the economic realities of Johannesburg’s residents. While the increase is significant, the utility has taken steps to minimize its impact on the most vulnerable households.

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